We are an Export Oriented Unit (EOU). We are a re-processor of waste and scrap of nylon/plastic. We purchase excise duty-paid waste from domestic as well as imported waste and scrap (PP & PE) on payment of all import, customs duties, etc. We want to sell the goods as per para 6.8 (h) & para 6.9 (b) of Foreign Trade Policy 2009-14. Since we have paid import duty on raw materials, can we clear the finished goods duty free or at a concessional rate of duty in the domestic tariff area (DTA)? If we export our finished goods, can we get rebate/refund of duties paid on import of goods? Please provide your advice with specific provisions or scheme, circulars, notification, etc.
Para 6.8 (h) of FTP refers to sale of finished goods by EOU in DTA against payment of full duties -- i.e., excise duty equivalent to customs duty leviable on like product if imported into India, in accordance with the first proviso to Section 3 of the Central Excise Act, 1944. For clearance of your finished goods from EOU to DTA at concessional rate of duty, you have to refer to Para 6.8 (a) of FTP and related notification 23/2003-CE dated March 31, 2003. Secondly, for rebate of the duties paid on inputs used in the manufacture of export goods, you may refer to Section 75 of the Customs Act, 1962 and Customs, Central Excise and Service Tax duty Drawback Rules, 1995.
You cannot get drawback at All Industry Rate but you can seek drawback through brand rate route. The best course of action is to import your inputs without duty payment under notification no. 52/2003-CE dated March 31, 2003, and procure the inputs from DTA without duty payment under notification no. 22/2003-CE dated March 31, 2003. In case you take Cenvat Credit of the duty paid on the inputs, you can claim refund of unutilised Credit on account of export under bond, under Rule 5 of Cenvat Credit rules, 2004 read with notification no.27/2012-CE (NT) dated March 17, 2012.
We removed the export goods from our factory without duty payment against our UT-1 and under cover of ARE-1. The goods were destroyed in an accident before they could be shipped. Can we claim remission of duty on the destroyed goods under Rule 21 of Central Excise Rules, 2002?
In case of export under CIF/CFR/FOB contracts, the place of removal is the port. The said Rule 21 allows remission of duty whenever goods are destroyed at any time before removal. Therefore, you are entitled to claim remission of duty on the destroyed goods. You may refer to the Tribunal Larger Bench decision in the case of Honest Bio-Vet Pvt. Ltd. [2014 (310) ELT 526 (Tri. LB)] for detailed legal discussions/justifications on the issue.
Our item falls under the classification 2904990. Can we claim drawback under 290499 of the All Industry Rate (AIR) Schedule?
Yes, as the tariff item and description given in AIR schedule are aligned with the Customs Tariff only at the four digit level.
Business Standard invites readers’ SME queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in
Para 6.8 (h) of FTP refers to sale of finished goods by EOU in DTA against payment of full duties -- i.e., excise duty equivalent to customs duty leviable on like product if imported into India, in accordance with the first proviso to Section 3 of the Central Excise Act, 1944. For clearance of your finished goods from EOU to DTA at concessional rate of duty, you have to refer to Para 6.8 (a) of FTP and related notification 23/2003-CE dated March 31, 2003. Secondly, for rebate of the duties paid on inputs used in the manufacture of export goods, you may refer to Section 75 of the Customs Act, 1962 and Customs, Central Excise and Service Tax duty Drawback Rules, 1995.
You cannot get drawback at All Industry Rate but you can seek drawback through brand rate route. The best course of action is to import your inputs without duty payment under notification no. 52/2003-CE dated March 31, 2003, and procure the inputs from DTA without duty payment under notification no. 22/2003-CE dated March 31, 2003. In case you take Cenvat Credit of the duty paid on the inputs, you can claim refund of unutilised Credit on account of export under bond, under Rule 5 of Cenvat Credit rules, 2004 read with notification no.27/2012-CE (NT) dated March 17, 2012.
We removed the export goods from our factory without duty payment against our UT-1 and under cover of ARE-1. The goods were destroyed in an accident before they could be shipped. Can we claim remission of duty on the destroyed goods under Rule 21 of Central Excise Rules, 2002?
In case of export under CIF/CFR/FOB contracts, the place of removal is the port. The said Rule 21 allows remission of duty whenever goods are destroyed at any time before removal. Therefore, you are entitled to claim remission of duty on the destroyed goods. You may refer to the Tribunal Larger Bench decision in the case of Honest Bio-Vet Pvt. Ltd. [2014 (310) ELT 526 (Tri. LB)] for detailed legal discussions/justifications on the issue.
Our item falls under the classification 2904990. Can we claim drawback under 290499 of the All Industry Rate (AIR) Schedule?
Yes, as the tariff item and description given in AIR schedule are aligned with the Customs Tariff only at the four digit level.
Business Standard invites readers’ SME queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in